Real Property Acquisitions and Development

6 Months Ended

Jun. 30, 2017

Real Property Acquisitions and Development [Abstract]

Real Property Acquisitions and Development

3. Real Property Acquisitions and Development

The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their relative fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Effective January 1, 2017, with our adoption of ASU 2017-01, transaction costs related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in “Other Expenses” on our Consolidated Statements of Comprehensive Income. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for information regarding our foreign currency policies.

Triple-net Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	30,440		$	18,901
Buildings and improvements				188,569			160,209
Acquired lease intangibles				-			2,876
	Total assets acquired			219,009			181,986
Accrued expenses and other liabilities				(20,855)			(1,459)
	Total liabilities assumed			(20,855)			(1,459)
Noncontrolling interests				(7,284)			-
Non-cash acquisition related activity(1)				(54,989)			(37,703)
	Cash disbursed for acquisitions			135,881			142,824
Construction in progress additions				76,245			85,687
Less:	Capitalized interest			(3,215)			(3,771)
	Foreign currency translation			(3,044)			(2,712)
Cash disbursed for construction in progress				69,986			79,204
Capital improvements to existing properties				15,269			14,877
	Total cash invested in real property, net of cash acquired		$	221,136		$	236,905
(1) For the six months ended June 30, 2017, $54,989,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the six months ended June 30, 2016, $31,014,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,630,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	10,590		$	5,617
Building and improvements				69,056			128,200
Acquired lease intangibles				3,596			6,334
Receivables and other assets				296			894
	Total assets acquired(1)			83,538			141,045
Accrued expenses and other liabilities				(8,606)			(4,853)
	Total liabilities assumed			(8,606)			(4,853)
Noncontrolling interests				(647)			(549)
Non-cash acquisition related activity(2)				(31,546)			(7,659)
	Cash disbursed for acquisitions			42,739			127,984
Construction in progress additions				42,787			134,019
Less:	Capitalized interest			(3,804)			(2,011)
	Foreign currency translation			3,060			(5,344)
Cash disbursed for construction in progress				42,043			126,664
Capital improvements to existing properties				60,129			47,553
	Total cash invested in real property, net of cash acquired		$	144,911		$	302,201
(1) Excludes $400,000and $134,000 of cash acquired during the six months ended June 30, 2017 and 2016, respectively.
(2) Includes $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable during the six months ended June 30, 2017. Includes $25,197,000 and $7,659,000 for the six months ended June 30, 2017 and 2016 related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

Outpatient Medical Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	25,060	$	-
Buildings and improvements				62,038		32,650
Acquired lease intangibles				8,397		-
Receivables and other assets				118		-
	Total assets acquired			95,613		32,650
Secured debt				(25,824)		-
Accrued expenses and other liabilities				(2,210)		(990)
	Total liabilities assumed			(28,034)		(990)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,499		16,647
Construction in progress additions				31,830		50,896
Less:	Capitalized interest			(1,343)		(1,561)
	Accruals(2)			6,530		(5,336)
Cash disbursed for construction in progress				37,017		43,999
Capital improvements to existing properties				17,409		25,099
	Total cash invested in real property		$	112,925	$	85,745
(1) Represents the acquisition of assets previously financed as real estate loans receivable. Please refer to Note 6 for additional information.
(2) Represents the change in non-cash consideration accruals for amounts to be paid in periods other than the period in which the construction projects converted to operations.

Construction Activity

The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented (in thousands):

			Six Months Ended
			June 30, 2017			June 30, 2016
	Development projects:
		Triple-net		$	266,650		$	-
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			35,363
	Total development projects				333,320			35,363
	Expansion projects				2,798			2,879
Total construction in progress conversions				$	336,118		$	38,242